$173 Million in Madoff Checks Reportedly Found
The New York Times
Published: Jan 09, 2009
Pressing the case that the disgraced financier Bernard L. Madoff should have his bail revoked, prosecutors said in court documents on Thursday that investigators found 100 signed checks worth $173 million in Mr. Madoff’s desk that were ready to be sent to family members and friends on the day of his arrest.
The checks were another indication, prosecutors said, that Mr. Madoff was trying to keep his assets away from his investors.
“What the defendant failed to highlight for the court in his rendition of events is the fact that, prior to his arrest, he announced his intention to transfer $200-$300 million of the remaining investor’s assets to selected family, friends and employees,” Assistant United States Attorney Marc Litt said in the filing.
“The only thing that prevented the defendant from executing the plan to dissipate those assets was his arrest by the F.B.I. on Dec. 11,” Mr. Litt writes.
Magistrate Judge Ronald L. Ellis is expected to rule soon, possibly as early as Thursday, on whether Mr. Madoff should be sent to jail. He is currently out on $10 million bail, but confined to his apartment on the Upper East Side of Manhattan.
In a court filing on Tuesday, prosecutors said that Mr. Madoff and his wife, Ruth, had sent packages of valuables worth about $1 million to his sons and brother, violating the terms of his bail agreement. The items included 16 watches, including diamond-encrusted timepieces from Tiffany and Cartier, 4 diamond brooches, 2 sets of cuff links and an emerald ring.
Mr. Madoff, who is said to have confessed last month to a huge Ponzi scheme, has promised the Securities and Exchange Commission not to dispose of any of his assets, which may eventually be sold and used to repay investors who lost money in the scheme.
At a hearing on Monday, a lawyer for Mr. Madoff, Ira Lee Sorkin, told Judge that many of the items were relatively inexpensive, including $25 cuff links and $200 mittens.
But the assistant United States attorneys Mr. Litt and Lisa A. Baroni said in their filing that Mr. Sorkin’s description of the packages was at best incomplete.
“The defendant sent a package containing a total of approximately 13 watches, one diamond necklace, an emerald ring and two sets of cuff links,” the filing said. “The government has been informed that the value of those items could exceed $1 million. Two other packages — containing a diamond bracelet, a gold watch, a diamond Cartier watch, a diamond Tiffany watch, four diamond brooches, a jade necklace and other assorted jewelry — also were sent to relatives.”
By mailing the jewelry, Mr. Madoff disobeyed a court order and showed that he presented a “serious risk of flight,” prosecutors wrote. They asked Judge Ellis to revoke Mr. Madoff’s bail and immediately send him to jail. A decision could come as early as Thursday afternoon.
Zachary W. Carter, the former United States attorney in the Eastern District of New York, said that prosecutors had a relatively good chance of persuading Judge Ellis to revoke his bail.
“The argument that I would make as a prosecutor would be that to the extent that Madoff ignored a legal obligation to preserve his assets, it is some indication that he would be willing to ignore other obligations, like remaining in the jurisdiction,” Mr. Carter, who is now a partner in New York at the law firm of Dorsey & Whitney, said. “It could be regarded as a step in the direction of flight.”
In a response filed late Wednesday, Mr. Sorkin and Daniel J. Horwitz, who represent Mr. Madoff, argued that jailing him would be unfair and wrong. Mr. Madoff is already being watched around the clock, both for his protection and to prevent flight, and has an electronic monitoring device, his lawyers wrote. In addition, they said, at this point, Mr. Madoff is too widely known and too disliked to get very far if he tried to flee. Instead of jail, they said, Mr. Madoff would accept having his property inventoried and all his outgoing mail checked to make sure he did not try to transfer valuables again.
As for the jewelry that Mr. Madoff sent last month, Mr. Madoff’s lawyers characterized it as “a few sentimental personal items.” Mr. and Mrs. Madoff’s decision to mail it, they said, was an honest mistake.
“Mr. Madoff gathered a number of watches that he had collected over the course of years, knowing that, due to the sudden change in his circumstances, he would never have an occasion to wear these watches again. To Mr. and Mrs. Madoff, the value of these items was purely sentimental,” the lawyers wrote.
Prosecutors, in their filing Thursday, said Mr. Madoff’s explanation that he was simply reaching out to friends and family was “preposterous”
“That’s what telephones, e-mails and personal letters are for,” the filing said
Upon hearing of the mailing, some of Mr. Madoff’s investors, and their lawyers, had strong sentiments of their own.
“His acts were outrageous,” said Jerry Reisman, a lawyer on Long Island who represents 13 investor-claimants, with aggregate claims of $150 million. “He violated a court order; he tried to secret his assets.”
Mr. Reisman said Mr. Madoff should be immediately confined to jail. “To use a great American expression in Webster’s dictionary — he has chutzpah,” Mr. Reisman said. “He’s gotten away with it for so long that he thought he could continue to get away with it.”
© The New York Times. All rights reserved. This article originally appeared in The New York Times.
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